Opening Bell: 04.03.14

Moody’s Is No-Show in Bond Deal Rating (WSJ)
When the sale of more than $1 billion in commercial-mortgage bonds went off without a hitch last week, one name was conspicuously missing from the prospectus: Moody’s Investors Service. The ratings firm, known for adopting more-cautious stances than its rivals, has been a mainstay on such deals during the aftershocks of the financial crisis. But with investors scrambling to buy higher-yielding bond deals, the underwriters on this one took a gamble that they could still sell the securities without the rater’s seal of approval. When the market was tougher, bankers “were not willing to [sell a bond] without putting a Moody’s rating on it,” said Lea Overby, head of commercial-mortgage-backed securities research at Nomura Securities International. “It’s worth a shot to try it now” given the market’s strength, she said.

Judge tosses man’s claim of ownership of Facebook (AP)
A federal judge has officially closed the book on a New York man’s multibillion-dollar lawsuit claiming half-ownership of Facebook. Judge Richard Arcara has granted Facebook and founder Mark Zuckerberg’s motion to dismiss Paul Ceglia’s lawsuit. Last week’s ruling affirms a magistrate judge’s recommendation from a year ago saying the lawsuit should be thrown out because the contract Ceglia based it on was faked. Ceglia is from Wellsville. He claimed he and Zuckerberg signed a 2003 software development contract that included a provision entitling him to half-ownership of Facebook in exchange for startup money for the budding company. Facebook lawyers say the two had a contract but references to Facebook were slipped in for the lawsuit.

Morgan Stanley CFO says companies need more female executives (Reuters)
Morgan Stanley Chief Financial Officer Ruth Porat on Wednesday called on government and corporate leaders to encourage the promotion of women into senior business roles, saying the number of women in top positions at U.S. corporations is “an embarrassment.”

Yelp Reviews Brew a Fight Over Free Speech vs. Fairness (WSJ)
In early 2012, Joe Hadeed, owner of Hadeed Carpet Cleaning Inc., arrived at his office atop a 70,000-square-foot warehouse in Springfield, Va., to discover a critique posted on Yelp.com: “Lots of hype, a mediocre cleaning and a hassle at the end. Don’t go with Joe!” wrote a “Mike M.” A few days later, another review, by “M.P.” popped up: “I will never use them again and advise others to proceed with caution!” it said. Over the next several weeks, a string of similarly harsh reviews replaced more-favorable comments “as if someone had flipped a switch,” said the 47-year-old Mr. Hadeed, in an interview last month at his offices, where trucks drop off carpets to be washed, rinsed and dried…Following the rash of negative Yelp reviews, business sank 30% in 2012, Mr. Hadeed says. Last year, Hadeed cleaned just 20,000 carpets, down from 29,000 in 2011. Revenue fell to $9.5 million from $12 million in 2011. Mr. Hadeed said the business has let 80 workers go and sold six trucks, reducing its fleet to 54…In July 2012, Hadeed sued the seven reviewers for defamation, and demanded that Yelp turn over their true identities. So far, both the Alexandria Circuit Court and the Virginia Court of Appeals have sided with Mr. Hadeed, holding Yelp in contempt for not turning over the names. Yelp in January appealed to the state Supreme Court, arguing that the reviews are protected under the First Amendment and that Mr. Hadeed offered scant evidence that they were fakes. This month the Supreme Court could issue an order granting or denying Yelp’s appeal, or schedule a hearing in Richmond, which could take place in the next 90-120 days.

Rachel Canning, teen who sued parents, picks college (USAT)
Rachel Canning, the New Jersey high school senior who made national headlines after suing her parents last month, has chosen a college. The 18-year-old Canning announced on her Facebook page in a public post Saturday that she plans to attend Western New England University as a biomedical engineering major on a $56,000 scholarship. “Decision made. WNE U class of 2018 BME Major w/ 56,000$ scholarship,” read the Facebook post. The post had more than 145 likes before it was removed or restricted to the public at about 1:30 p.m. Tuesday…Canning sued her parents, Sean and Elizabeth Canning of Lincoln Park, for child support and college costs, filing a lawsuit on Feb. 24 in Superior Court in Morristown, N.J. After the judge denied Canning’s claim for immediate assistance on March 4, she moved back in with her parents March 11, and dropped her lawsuit the following day.

How High-Frequency Stock Trader Quantlab Guarded Its Algorithms (WSJ)
Under a gazebo’s shade, a Ukrainian physicist who aspires to be a monk met with a Milwaukee lawyer seven years ago and began planning a firm whose profits from rapid-fire stock trades would go mostly to charity. They and another founder eventually named it SXP Analytics LLC after St. Xenia, an 18th century Russian who gave the poor her possessions. Today, SXP’s founders stand accused of stealing someone else’s prized possessions: the algorithms of a powerful Houston high-frequency-trading company. Eleven months after the gazebo meeting, more than 70 Federal Bureau of Investigation agents raided SXP offices and employees’ homes in seven states, seizing computers, servers and flash drives. The search target was computer code belonging to the Houston firm, Quantlab Financial LLC.

Fed should hike rates in second half of 2015: Williams (Reuters)
“Given the economic outlook, and given also my view that we need accommodative policy relative to historical norms, we need to have relatively low levels of interest rates for quite some time,” San Francisco Federal Reserve Bank President John Williams told Reuters. “My own view is it makes sense to start raising rates in the second half of 2015.”

Brazil Central Bank Hints at End to Rate Increases (WSJ)
“There will probably be another increase at the next meeting, if there’s no surprise, but the continuity of the cycle beyond that is unlikely,” said economists at Banco Fator in a note. “After all, there were lots of caveats and conditions” in the statement, they said.

A Pivotal Financial Crisis Case, Ending With a Whimper (Dealbook)
The regulatory cloud has lifted for Kenneth D. Lewis. Last week, the former head of Bank of America received a modest penalty, paid for by his former employer, and a temporary ban from an industry he is no longer a part of. In this seminal financial crisis investigation, regulators put on a master class in how to take a strong case and render it weak.

Artist plants fake Justin Bieber CDs in LA stores (AP)
Paz, a 25-year-old electronic musician and artist, says he planted 5,000 copies of an album that appears to be Bieber’s “Believe” but actually contains a copy of his own CD at retailers such as Best Buy, Wal-Mart and Target on Tuesday, April Fool’s Day. “We were meticulous,” said Paz, who fancies the stunt more of a performance art piece than an April Fool’s gag. “We paid a lot of attention to detail because we wanted these to stay up on shelves as long as possible.” From the outside, the wrapped CDs resemble “Believe” right down to the bar code and silky Bieber portrait on the cover. However, Paz’s artwork is inside the back cover, and the disc itself is slathered with images of cats, pizzas and a dog stuffed inside a taco. The CD contains the 13 tracks from Paz’s synth-heavy independent release “From the Bottom of My Heart to the Top of Your Lungs.” The Associated Press independently verified the stunt by purchasing random copies of what looked like Bieber’s “Believe” from widely scattered LA-area locations, such as a Target store in Burbank and Best Buy stores in West Hollywood and Culver City. In each instance, the CDs were scanned and paid for as if they were Bieber CDs. But when they were opened outside the store, each contained a copy of Paz’s album, not Bieber’s…Paz, whose full name is Paz Dylan, said he wanted to use so-called “big-box retailers” as his artistic canvas by “droplifting” his music into the hands of consumers.

I can confirm this. She'll be converting her parents hard earned money into college freshmen dollars to spend on pizza. Then she'll start using her mouth for more than just complaining how hard her life is.

Nope. I'm going with either 'Human Development and Family Resources', the college major for women who want to become baby factories. Or with 'Parks and Recreation' the major of choice amongst UCONN basketball players.

> Guy who knows these two majors actually exist.

SAC

Mary Jo White was the top federal prosecutor in New York City during Bill Bratton’s first run as the Big Apple’s top cop, and she learned a few lessons from his “broken windows” theory: Clean a place up a little, and throw the fucking book at the street urchins who are messing things up with […]